Legacy Cabinets Grapples with Meteoric Growth

This Alabama-based manufacturer is on the verge of cracking $20 million in sales in only its fourth full year of business.

BY RICH CHRISTIANSON

 

 

The Heritage line, offered in a choice od cathedral or square solid oak raised-panel designs has proven popular with home builders, the biggest market fueling Legacy Cabinets' phonomenal growth.

If timing is everything, then Legacy Cabinets L.L.C. timed its entry into the cabinet industry just perfectly. Capitalizing on a strong economy, marked by a higher than expected rate of housing starts, the Eastaboga, AL-based company has shattered the revenue goals set by its owners when it opened four years ago. Sales are projected to reach $21 million this year, more than double the $10 million annual sales they had hoped to achieve by the end of the company's fifth year.

"Frankly, we would have been very happy just to reach our $10 million goal," said Rodney Suggs, president of Legacy Cabinets. "Not in our wildest dreams could we have imagined that we would have grown this fast. It seems that we just kept working and working, and when we looked up we found ourselves well above where we hoped to be."

While the principals of Legacy Cabinets are clearly enjoying the view, they know this is not the time to rest on their laurels. Management's most pressing challenge is sustaining the momentum that has brought the company so far, so fast. Complicating matters is the fact that the company is pretty much maxed out of manufacturing space despite having nearly doubled the size of its facility last year. In addition, Legacy's owners are wary of overextending their finances on capital investment in the event of an economic downturn.

"The recent interest rate cuts by the Fed look good, but who knows? We know this (boon) can't last forever," Suggs said. "Our plan is to proceed with caution, prioritize future equipment purchases that will help improve our efficiency and try to better manage our growth."

A 'Rough Start'

Suggs and four of his six partners threw caution to the wind when they left their jobs at Wellborn Cabinets and pooled their personal finances to launch Legacy Cabinets. As amazingly good as business has been, Legacy Cabinets' road to success has not been totally pot-hole free.

"The first two years were tough," Suggs said, noting cashflow and training inexperienced people to be woodworkers among the problems the newborn company had to overcome. He added, "Being a new company, we had to prove that we were capable of consistently meeting tight delivery schedules. This is an extremely competitive business. When you grow as fast as we have, there is constant pressure to keep up with orders. Plus, we have to be flexible to accept changes, such as size adjustments, at late stages. If we don't do it, we will lose business to someone else who can. Fortunately, we have been able to keep up the pace so far by expanding the plant and adding new equipment."

One early misstep that Legacy's owners adeptly recovered from was the decision to produce European-style frameless cabinets. "Our original plan was to produce our white melamine cabinets as frameless and our wood line with face frames," Suggs said. "Because many of our employees were new to the industry, and because we didn't have much experience building frameless cabinets, things got overly complicated and confusing in terms of manufacturing and production scheduling."

Suggs said Legacy abandoned frameless construction after about two months. Ever since, the company's white European-style cabinets sport a face frame and concealed hinges behind a full overlay door. "We basically fell back to what we knew how to do best, which is face frame cabinets, featuring glue and staple construction," Suggs said.

Staying Focused

Bucking the Remodeling Trend

According to the Kitchen Cabinet Manufacturers Assn., about three out of every four cabinets sold last year was used in a remodeling project. Legacy Cabinets is bucking this trend in selling most of its cabinets for use in new homes.

Rodney Suggs, president, said the company did not make a conscious decision to pursue the builder market. "This just happens to be the way our business has evolved," he said. "It could be that our products being in the middle to low price range is attractive to that market."

Ken Stratton, vice president of finance, said Legacy Cabinets sells most of its cabinets through dealers and stocking distributors. The company concentrates its sales efforts east of the Mississippi River. Hot markets have included Atlanta, the Carolinas and several pockets of the Northeast.

Discontinuing frameless cabinets to concentrate solely on manufacturing frame cabinets is but one example of how Legacy Cabinets' owners have tried to fine-tune the focus of their business in light of phenomenal growth.

"It hasn't always been easy, but we are trying to stay very focused," Suggs said. "Buying solid wood cabinet doors from several sources has been integral to our expansion. It would have been difficult to get to where we are without having good partner suppliers. By outsourcing doors and other wood components we have been able to concentrate on doing what we do better."

For example, Suggs said purchasing value-added wood components eliminated the need to have a rough mill and allowed the company to focus on improving other areas of its operations, such as finishing and panel processing.

Last year, Legacy Cabinets added 60,000 square feet of space to house a new overhead finishing line. The line, featuring spray booths, drying ovens and high-pressure low-volume spray guns from DeVilbiss was engineered by Raypaul of Marietta, GA. The new continuous finishing line applies three coats of sealer, stain and topcoat to wood doors, drawer fronts and frames.

The system represents a tremendous improvement to the company's former finishing method that involved running parts three times around the same line to fully finish each workpiece. "At the time we didn't have another choice because we didn't have the space," Suggs said.

The recent purchase of a Sorbini UV flat line system from Stiles Machinery has also helped improve the company's finishing capabilities. The UV system is used to pre-stain all flat parts such as shelving and plywood sides.

 

Experience Adds Up

The fact that Legacy Cabinets L.L.C. (limited liability company) is only four years old belies the wealth of professional experience of its owners.

Combined, the seven principals of Legacy Cabinets have served more than 100 years in the cabinet industry. Most of that experience was gained from their previous careers at Wellborn Cabinets, located less than an hour's drive away in Ashland, AL.

The seven partners and their current positions, are:

� Rodney Suggs, president;

� Johnny Fables, vice president of sales and marketing;

� Ken Stratton, vice president of finance;

� Carey Nunn, data processing and production control;

� Joe Grogan, purchasing;

� Fred Harris, personnel and maintenance; and

� Linda Watson, payroll and accounts.

The first five partners have been with Legacy since its incorporation in September 1994. Harris and Watson subsequently joined the team later in 1994 and 1996 respectively.

"The majority of us wanted to try something different and have more control over our professional lives," said Stratton.

Suggs said the seven partners, with their diverse areas of expertise and talent, make for a strong and well-balanced business team. "We make for a wide mixture of personalities. Some of us are more adventurous, others are more conservative. Most importantly, though, we're each bound and determined to succeed and committed to one another. No one wants to be the one to drop the ball."

Other Equipment Investments

Legacy's most recent purchase was a Northwood CNC router with two heads and independent tool changers. The twin-table router is mainly dedicated to machining MDF used to manufacture thermofoil doors. The one-piece doors are pressed on a Wemhoner membrane press.

"Prior to buying the Northwood router, we routed the doors on a Biesse Rover 335 point-to-point machining center," Suggs said. "As our volume grew, it became necessary to have a machine just for routing doors. The router has freed up the Biesse to be used more for drilling holes and routing other shaped parts."

A Selco panel saw feeds the CNC router and boring machine with a steady stream of cut-to-size parts. And while the company purchases its solid wood doors and drawer fronts, it does have a Dodds dovetail machine for making dovetailed drawer boxes.

Future Plans

Asked if there was anything that he and his partners would do differently, if given a chance to start over, Suggs said, "We would like to have started with a bigger facility. But there are a lot of risks to being a new business and no guarantees that you will make it."

Legacy Cabinets' space crunch is aptly illustrated by its shipping department. "When we added more truck bays last December (giving the company 21), we thought that would last us several years. Already, that's not enough," Suggs said in noting that the company ships about 900 cabinets a day.

Space constraints dominate long-range planning meetings, Suggs said. Legacy Cabinets owns 15 acres of land and could conceivably purchase adjoining property. At the company's current rate of growth, it does not seem to be a matter of if, but when Legacy will buy room to grow.

"Expansion and reorganization seem to be a never-ending battle," Suggs said. "Right now we are looking at the possibility of adding another 50,000 square feet of manufacturing space."

Suggs added that the company is investigating adding a second assembly line and that an automatic dowel insertion machine and an edgebander rank high on the company's wish list.

No doubt Legacy Cabinets will need these and other new machines to achieve its new goal of $35 million in annual sales by 2003.

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